Magazine article Marketing

Adnams

Magazine article Marketing

Adnams

Article excerpt

The beer brand has found its principled positioning ill-suited to the recession, writes Alex Brownsell.

When down to one's last pounds 10 in the pub, facing the task of making the money last all night, it is fair to assume that the carbon footprint of a pint becomes a low priority.

Suffolk brewer Adnams has positioned itself as a 'cuddly' beer, with good environmental practices and ethical community schemes. However, it is a stance not best-suited to a recession.

After a decade of steady growth, the brand's year-on-year sales fell in 2008, from pounds 47.4m to pounds 47.1m. Profitability also plummeted by 64% to pounds 1.5m. In an effort to cut costs, chairman Jonathan Adnams has frozen the pay of senior staff and sold six of its pubs.

Not least among Adnams' problems is its confused brand identity. A quick online search returns the description 'quality wine, premium beer and stylish kitchenware'.

As well as its beers, wines and Cellar & Kitchen Stores, Adnams owns a chain of hotels in Suffolk. It even launched a 'carbon neutral beer' last year, named Adnams East Green, which seems unlikely to have the old boys at the pub rushing to trade in their usual tipple.

The company has attempted to bring together its portfolio, most recently with a bi-monthly newsletter, created by Balloon Dog, aimed at professionals.

Can Adnams tap into a recession-hit consumer base? We asked Matt Coles, partner at licensed trade specialist Cardinal Research, and Adnams advocate Craig Smith, editorial director at customer publishing agency Velo, for their thoughts.

DIAGNOSIS - Two industry experts suggest how Adnams can get sales flowing

MATT COLES PARTNER, CARDINAL RESEARCH

Licensees, ale drinkers and industry professionals all love Adnams.

The brand benefits from solid positioning, contemporary packaging and the positive values of craft, tradition and local provenance. These are reinforced by a genuine commitment to sustainability, with eco-friendly distribution centres, carbon-neutral brand launches, reduced packaging initiatives and staff investment programmes.

Despite a decline in the on-trade market, Adnams' sales remain stable So what is the additional operating expense that caused the profit slump?

Steep increases in the price of raw materials, a weak pound, asset depreciation, pub acquisitions and retail brand launches are all factors, even when such costs are spread over the long term.

However, indicators show that the cask ale market is bucking the downward trend of the wider sector, and has the potential to enjoy a renaissance. …

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